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Kick Starter

Kick Starter

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Published by Eriq Gardner

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Published by: Eriq Gardner on Feb 16, 2012
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02/16/2012

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UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF NEW YORKKICKSTARTER, INC.,Plaintiff,-against-ARTISTSHARE, INC. andFAN FUNDED, LLC,Defendants.Civil Action No. 11-cv-6909 (PAC)
ORAL ARGUMENT REQUESTED
MEMORANDUM OF LAW IN SUPPORT OF DEFENDANTS’S MOTIONTO DISMISS PLAINTIFF’S DECLARATORY JUDGMENT COMPLAINT
Theodore K. Cheng (TC-8414)Stephanie S. Spangler (SS-8900)YOON & KIM LLP11 East 44
th
Street
 – 
Suite 500New York, NY 10017-3608T: (212) 584-0058F: (212) 584-0059tcheng@yoonkimlaw.comsspangler@yoonkimlaw.comCraig R. Smith (
admission pending
)L
ANDO
&
 
A
NASTASI
, LLPRiverfront Office Park One Main Street
 – 
11
th
FloorCambridge, MA 02142T: (617) 395-7000F: (617) 395-7070csmith@lalaw.com
 Attorneys for Defendants ArtistShare, Inc. and Fan Funded, LLC 
 
Case 1:11-cv-06909-PAC Document 21 Filed 02/03/12 Page 1 of 15
 
2
TABLE OF CONTENTS
Page
 
PRELIMINARY STATEMENT ................................................................................................ 3
 
FACTUAL BACKGROUND ..................................................................................................... 4
 
ARGUMENT .............................................................................................................................. 8
 
I. APPLICABLE LEGAL PRINCIPLES ....................................................................8
 
A. General Declaratory Judgment Jurisdiction ................................................ 8
 
B. Declaratory Judgment Jurisdiction in Patent Cases .................................... 9
 
II.
 
ARTISTSHARE‟S AMICABLE NEGOTIATIONS WITH
KICKSTARTER DID NOT CREATE A SUBSTANTIALCONTROVERSY OF SUFFICIENT IMMEDIACY AND REALITY TOWARRANT THE ISSUANCE OF A DECLARATORY JUDGMENT ...............11
 
III.
 
THERE IS NO SUBSTANTIAL CONTROVERSY BETWEENARTISTSHARE AND KICKSTARTER REGARDING THE VALIDITYOF THE PATENT .................................................................................................14
 
IV. THE COURT SHOULD EXERCISE ITS DISCRETION AND DISMISS
KICKSTARTER‟S DECLARATORY JUDGMENT CLAIMS
...........................14
 
CONCLUSION ......................................................................................................................... 15
 
Case 1:11-cv-06909-PAC Document 21 Filed 02/03/12 Page 2 of 15
 
3
Defendants ArtistShare, Inc. and Fan Funded, LLC (“ArtistShare”) move to dismissPlaintiff Kickstarter, Inc.‟s (“Kickstarter”) Complaint under Rule 12(b)(1) of the Federal Rules
of Civil Procedure for lack of subject matter jurisdiction.
PRELIMINARY STATEMENT
Kickstarter‟s complaint for declaratory relief 
should be dismissed because there is nocase of actual controversy. Kickstarter filed its complaint during business negotiations withArtistShare in which the parties had exchanged proposals for either licensing or purchasing the
ArtistShare patent. When Kickstarter‟s offer to purchase the patent was not accepted,
Kickstarter decided to take a different approach
 – 
Kickstarter filed suit rather than provide acounter-proposal. The Declaratory Judgment Act was not intended to be used as a tool to forcemore favorable settlement terms.
See
 
 EMC Corp. v. Norand Corp.
, 89 F.3d 807, 815 (Fed. Cir.1996) (dismissing declaratory judgment complaint that was filed as a tactical measure to improvethe litigant
s posture in ongoing
 
negotiations).
ArtistShare‟s communications with Kickstarter, taken individually and in totality,
do notshow a substantial controversy, between parties having adverse legal interests, of sufficientimmediacy and reality to warrant the issuance of a declaratory judgment. ArtistShare neveralleged that Kickstarter infringed the ArtistShare patent during their negotiations; nor didArtistShare threaten litigation.
ArtistShare‟s
amicable business negotiations with Kickstarterevince a good faith attempt to enter into a cooperative relationship. The parties should have anopportunity to continue their discussions without the expense and adversity inherent in litigation.
Case 1:11-cv-06909-PAC Document 21 Filed 02/03/12 Page 3 of 15

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